74software · EURONEXT:74SW
74software — Axway — H1 2018 Earnings Presentation
34 slides from 74software's earnings presentation, Jul 26, 2018
Slide 1: 2018 Half-Year Results
2018 Half-Year Results Analyst conference Paris - July 26, 2018
Slide 2: Forward-looking statements
Forward-looking statements • This presentation contains forecasts that may be subject to various risks and uncertainties concerning the company’s future growth and profitability. The Group highlights that signatures of license contracts, which often represent investments for clients, are historicall
Slide 3: Presentation of 2018 Half-Year Results
Presentation of 2018 Half-Year Results Agenda 1 - 2018 Half-Year Financial results and Operating position 2 - AMPLIFY™ - Accelerating execution of the strategy 3 - 2018 Targets & 2020 Ambitions 4 - Q&A session Patrick Donovan, Chief Executive Officer 3
Slide 4: 2018 Half-Year Financial results and Operating position
2018 Half-Year Financial results and Operating position
Slide 5: 2018 Half-Year - Income statement
2018 Half-Year - Income statement In millions of euros H1 2018 H1 2017 Revenue 134.9 142.8 of which License 23.8 25.0 ▪ Stable revenue at of which Subscription 18.8 17.2 constant exchange rates* of which Maintenance 69.9 73.5 Subtotal License, Subscription & Maintenance 112.5 115.7 ▪ Significant inc
Slide 6: 2018 Half-Year - Change in revenue
2018 Half-Year - Change in revenue 150 +€2.8m -€7.9m €142.8m 140 -€2.8m €134.9m Consolidated USD vs. EUR = -10.6% since 03/01/2017 2.0% 130 organic decrease €m 120 110 100 H1 2017 Scope Exchange rates Organic H1 2018 Revenue effect effect growth Revenue 6
Slide 7: 2018 Half-Year - Revenue by Activity
2018 Half-Year - Revenue by Activity H1 2017 H1 2017 Total Organic [€m] H1 2018 Restated* Reported Growth Growth* 18% 16% License Services License 23.8 23.8 25.0 -4.8% 0.0% Subscription 18.8 18.2 17.2 9.3% 3.3% 14% Subscription Maintenance 69.9 69.7 73.5 -4.9% 0.3% Services 22.5 26.0 27.1 -17.0% -13
Slide 8: Focus on License activities in the first half of 2018
Focus on License activities in the first half of 2018 Organic growth % of Revenue H1 2017 H1 2017 Total Organic in H1 2018 in H1 2018 [€m] H1 2018 Restated* Reported Growth Growth* 0.0% 18% License 23.8 23.8 25.0 -4.8% 0.0% of which Q1 18 8.2 9.0 9.6 -14.3% -8.7% Main products: of which Q2 18 15.5 1
Slide 9: Focus on Subscription activities in the first half of 2018
Focus on Subscription activities in the first half of 2018 Organic growth % of Revenue H1 2017 H1 2017 Total Organic in H1 2018 in H1 2018 [€m] H1 2018 Restated* Reported Growth Growth* + 3.3% 14% Subscription 18.8 18.2 17.2 9.3% 3.3% * Alternative performance measures are defined in the glossary at
Slide 10: Sales transformation in progress
Sales transformation in progress New New ACV in H1 18 Weighting Weighted New Organic [€m] Signatures Factor Signatures Growth* Value License New 23.8 1x 23.8 €4.7m Subscription 4.7 3x 14.0 vs. €4.1m in H1 2017 (ACV*) Signatures monitoring vs. H1 17 First Half 2018 37.8 +4.6% +4.6 % * Alternative per
Slide 11: Main Balance Sheet items at 06/30/2018
Main Balance Sheet items at 06/30/2018 Cash and equivalents DSO Total Assets €47.6m 63 days €557.5m vs. €28.1m at 12/31/2017 vs. 51 days at 06/30/2017 vs. €551.1m at 12/31/2017 Net debt Deferred revenues Total Equity €0.9m €94.4m €353.9m vs. €24.1m at 12/31/2017 vs. €84.5m at 06/30/2017 vs. €344.1m
Slide 12: Cash flows & covenants at 06/30/2018
Cash flows & covenants at 06/30/2018 06/30/2018 12/31/2017 06/30/2017 In millions of euros 06/30/2018 06/30/2017 Net profit for the period 3.9 2.6 Change in operating working capital requirements 16.0 16.5 EBITDA Cost of debt 101.4 40.2 1908 (covenant > 5) Net cash from operating activities 25.5 22.
Slide 13: AMPLIFY - Accelerating execution of the strategy
AMPLIFY™ Accelerating execution of the strategy
Slide 14: Strategy execution since April 2018
Strategy execution since April 2018 STRATEGY GOVERNANCE EXECUTION ▪ Become a Market Leader in ▪ Appointment of new leaders: ▪ Product portfolio audit Hybrid Integration Platforms (HIP) → Deputy CFO ▪ Launch of planned additional investments, → Update of the AMPLIFY™ 2020 - HIP → Chief Customer Offic
Slide 15: Axway's DNA: Move, integrate and open company data
Axway’s DNA: Move, integrate and open company data Since the beginning, we have moved and And we will continue to securely move, integrated our Customers' data in a secure manner integrate or expose corporate data OLD NEW WAY WAY Axway's mission remains the same, we are merely implementing our marke
Slide 16: Update on Axway's products
Update on Axway's products Specialised products AMPLIFY™ Products App Dev Track & Trace B2B / EDI Accounting Integration MFT M&A Validation or Authority R&D Analytics AMPLIFY™ IT Operation Management API Management MailGate Content Collaboration 75% of our signatures in the first half of 2018 16
Slide 17: Axway AMPLIFY: our Hybrid Integration Platform
Axway AMPLIFY™: our Hybrid Integration Platform Engagement – Mobile, IoT, Web, Apps Partner Management/Onboard AMPLIFY AMPLIFY AMPLIFY AMPLIFY Central Titanium SDK API Portal B2Bi Governance Marketplace to discover AMPLIFY Content Collaboration and Content Services Collaboration/ EFSS partners, busi
Slide 18: Customer Success Organisation
Customer Success Organisation Roland Royer, Chief Customer Officer
Slide 19: Evolution of practices in a Subscription world
Evolution of practices in a Subscription world IT Focus Business Focus Customer Acquisition Customer Growth Upfront Revenue Lifetime Revenue Episodic engagement Continuous engagement Reactive support Proactive Value Implementation services Customer Outcomes 19
Slide 20: Customer engagement models
Customer engagement models Sequences of a perpetual License offering Cycle of a Subscription offering PURCHASE SUBSCRIPTION SALE IMPLEMENT SUPPORT RENEW Try & Buy / Sales 20
Slide 21: Customer Success Organisation
Customer Success Organisation Objectives Customer Centric Organisation ▪ Help customers accelerate their ▪ Bring together and align all players ▪ Creation of the Customer Success transformation through rapid interacting with customers Manager function to support results customers throughout their li
Slide 22: Accelerating execution of the strategy
Accelerating execution of the strategy Renew and Extend Customer Experience Access to new Monitor Customer insights & journey AMPLIFY Services Business & Optimize the customer experience health Engage Customers Accelerate & support time to Customer Support value Services offering Axway community, Su
Slide 23: 2018 Targets & 2020 Ambitions
2018 Targets & 2020 Ambitions
Slide 24: Outlook for the second half of 2018
Outlook for the second half of 2018 Acceleration in H2 of planned additional investment 3 to €5m of investment in 2018 1 Confirmation of the additional envelope of approximately 15 M€ per year dedicated to AMPLIFY™ Implementation of tools facilitating Subscription growth: 2 - New offerings - Evolu
Slide 25: 2018 Targets
2018 Targets ➢ Organic revenue growth of between -3 and 0% ➢ Profit on Operating Activities of between 8 and 11% of revenue 25
Slide 26: FY 2020 Ambitions
FY 2020 Ambitions ➢ Become a market leader in Hybrid Integration Platforms ➢ Maintain revenue at approximately €300m "organically stable compared to 2017“ while transforming the revenue mix from License to Subscription ➢ Seize strategic acquisition opportunities 26
Slide 27: Q&A Session
Q&A Session Microphones are available with the hostesses
Slide 28: Appendices
axway Appendices
Slide 29: 2018 Half-Year - Revenue by geographic area
2018 Half-Year - Revenue by geographic area H1 2017 H1 2017 Total Organic [€m] H1 2018 Restated* Reported Growth Growth* 24% France 37.3 38.7 38.7 -3.6% -3.6% 28% Rest France of Europe Rest of Europe 32.4 33.4 33.7 -3.9% -3.0% Americas 58.4 58.4 62.7 -6.9% 0.0% Asia / Pacific 6.8 7.2 7.8 -12.8% -5.6
Slide 30: Simplified Balance Sheet at 06/30/2018
Simplified Balance Sheet at 06/30/2018 In millions of euros 06/30/2018 06/30/2017 12/31/2017 Assets Goodwill 339.5 339.8 333.6 ▪ High cash position at Non-current assets 424.0 467.8 420.7 €47.6m Trade receivables 55.6 48.7 71.1 Other current assets 30.3 28.3 31.2 ▪ DSO at 63 days, up due to Cash and
Slide 31: Changes in equity and earnings per share at 06/30/2018
Changes in equity and earnings per share at 06/30/2018 In millions of euros 06/30/2018 06/30/2017 12/31/2017 Equity at Beginning of Period 344.1 374.8 374.8 ▪ Dividend payment of Profit for the period 3.9 2.6 4.4 €0.20 per share on Dividends - -8.5 -8.5 July 4, 2018 Capital increase 0.2 2.8 3.2 ▪ Si
Slide 32: 2018 Half-Year – Headcount
2018 Half-Year – Headcount 06/30/2018 12/31/2017 France 467 518 Rest of Europe 727 733 Americas 514 515 Asia - Pacific 72 74 Axway 1,780 1,839 32
Slide 33: Shareholding structure at 06/30/2018
Shareholding structure at 06/30/2018 Pasquier Odin Sopra Treasury Sopra Steria Managers Caravelle Public Family Family GMT Shares Shares outstanding 32.57% 0.13% 1.37% 1.64% 21.22% 12.12% 30.77% 0.18% Voting rights 35.98% 0.13% 1.50% 1.60% 25.87% 14.78% 20.14% Shareholders’ agreement 21,224,196 Shar
Slide 34: Alternative Performance Measures
Alternative Performance Measures • Restated revenue: Revenue for the prior year, adjusted for the consolidation scope and exchange rates of the current year. • Organic growth: Growth in revenue between the period under review and the prior period, restated for consolidation scope and exchange rate i